Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2015 | Feb. 08, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NETSOL TECHNOLOGIES INC | |
Entity Central Index Key | 1,039,280 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,458,250 | |
Trading Symbol | NTWK | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 13,986,773 | $ 14,168,957 |
Restricted cash | 90,000 | 90,000 |
Accounts receivable, net of allowance of $487,937 and $524,565 | 6,025,334 | 6,480,344 |
Accounts receivable, net - related party | 5,749,523 | 3,491,899 |
Revenues in excess of billings | 5,061,568 | 5,267,275 |
Other current assets | 2,671,613 | 2,012,190 |
Total current assets | 33,584,811 | 31,510,665 |
Property and equipment, net | 23,251,920 | 25,119,634 |
Intangible assets, net | 20,877,711 | 22,815,467 |
Goodwill | 9,516,568 | 9,516,568 |
Total assets | 87,231,010 | 88,962,334 |
Current liabilities: | ||
Accounts payable and accrued expenses | 5,907,103 | 5,952,561 |
Current portion of loans and obligations under capitalized leases | 3,767,193 | 3,896,353 |
Unearned revenues | 3,546,819 | 4,897,327 |
Common stock to be issued | 88,324 | 88,324 |
Total current liabilities | 13,309,439 | 14,834,565 |
Long term loans and obligations under capitalized leases; less current maturities | 273,109 | 487,492 |
Total liabilities | $ 13,582,548 | $ 15,322,057 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value; 500,000 shares authorized; | ||
Common stock, $.01 par value; 14,500,000 shares authorized; 10,418,350 shares issued and 10,391,071 outstanding as of December 31, 2015 and 10,307,826 shares issued and 10,280,547 outstanding as of June 30, 2015 | $ 104,184 | $ 103,078 |
Additional paid-in-capital | 119,890,798 | 119,209,807 |
Treasury stock (27,279 shares) | (415,425) | (415,425) |
Accumulated deficit | (40,262,084) | (40,726,121) |
Stock subscription receivable | (1,139,672) | (1,204,603) |
Other comprehensive loss | (18,546,296) | (17,167,100) |
Total NetSol stockholders' equity | 59,631,505 | 59,799,636 |
Non-controlling interest | 14,016,957 | 13,840,641 |
Total stockholders' equity | 73,648,462 | 73,640,277 |
Total liabilities and stockholders' equity | $ 87,231,010 | $ 88,962,334 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 487,937 | $ 524,565 |
Preferred stock, par value | $ .01 | $ .01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 |
Common stock, shares issued | 10,418,350 | 10,307,826 |
Common stock, shares outstanding | 10,391,071 | 10,280,547 |
Treasury stock, shares | 27,279 | 27,279 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Revenues: | ||||
License fees | $ 709,691 | $ 2,100,715 | $ 1,903,045 | $ 3,685,268 |
Maintenance fees | 3,240,472 | 3,276,125 | 6,252,710 | 5,984,653 |
Services | 9,574,104 | 5,378,584 | 16,327,977 | 9,627,664 |
Maintenance fees - related party | 31,755 | 53,462 | 189,986 | 193,575 |
Services - related party | 2,635,675 | 1,543,718 | 4,823,083 | 3,088,595 |
Total net revenues | 16,191,697 | 12,352,604 | 29,496,801 | 22,579,755 |
Cost of revenues: | ||||
Salaries and consultants | 4,925,565 | 4,298,900 | 9,925,455 | 8,415,117 |
Travel | 754,009 | 590,353 | 1,235,462 | 1,012,224 |
Depreciation and amortization | 1,461,466 | 1,800,753 | 2,935,701 | 3,602,320 |
Other | 1,022,682 | 662,046 | 1,961,479 | 1,336,909 |
Total cost of revenues | 8,163,722 | 7,352,052 | 16,058,097 | 14,366,570 |
Gross profit | 8,027,975 | 5,000,552 | 13,438,704 | 8,213,185 |
Operating expenses: | ||||
Selling and marketing | 2,002,990 | 1,574,955 | 3,701,394 | 2,707,315 |
Depreciation and amortization | 285,616 | 438,003 | 576,788 | 1,018,776 |
General and administrative | 3,536,676 | 3,911,754 | 6,902,723 | 7,587,510 |
Research and development cost | 117,924 | 80,437 | 229,994 | 146,702 |
Total operating expenses | 5,943,206 | 6,005,149 | 11,410,899 | 11,460,303 |
Income (loss) from operations | 2,084,769 | (1,004,597) | 2,027,805 | (3,247,118) |
Other income and (expenses) | ||||
Loss on sale of assets | (2,333) | (69,543) | (14,206) | (80,595) |
Interest expense | (72,156) | (47,265) | (140,329) | (120,358) |
Interest income | 35,299 | 106,078 | 87,411 | 163,997 |
Loss on foreign currency exchange transactions | (134,527) | (421,082) | (248,246) | (341,862) |
Other income | 120,684 | 18,162 | 174,998 | 18,539 |
Total other income (expenses) | (53,033) | (413,650) | (140,372) | (360,279) |
Net income (loss) before income taxes | 2,031,736 | (1,418,247) | 1,887,433 | (3,607,397) |
Income tax provision | (273,275) | (87,683) | (348,498) | (127,759) |
Net income (loss) | 1,758,461 | (1,505,930) | 1,538,935 | (3,735,156) |
Non-controlling interest | (883,396) | 138,764 | (1,074,898) | 529,961 |
Net income (loss) attributable to NetSol | $ 875,065 | $ (1,367,166) | $ 464,037 | $ (3,205,195) |
Net income (loss) per common share | ||||
Basic | $ 0.08 | $ (0.14) | $ 0.05 | $ (0.34) |
Diluted | $ 0.08 | $ (0.14) | $ 0.04 | $ (0.34) |
Weighted average number of shares outstanding | ||||
Basic | 10,308,186 | 9,654,334 | 10,294,760 | 9,433,829 |
Diluted | 10,548,922 | 9,654,334 | 10,535,496 | 9,433,829 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 875,065 | $ (1,367,166) | $ 464,037 | $ (3,205,195) |
Other comprehensive income (loss): | ||||
Translation adjustment | (665,906) | 1,116,563 | (1,914,473) | (1,909,466) |
Comprehensive income (loss) | 209,159 | (250,603) | (1,450,436) | (5,114,661) |
Comprehensive income (loss) attributable to non-controlling interest | (249,910) | 390,434 | (535,277) | (680,041) |
Comprehensive income (loss) attributable to NetSol | $ 459,069 | $ (641,037) | $ (915,159) | $ (4,434,620) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,538,935 | $ (3,735,156) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 3,512,489 | $ 4,621,096 |
Provision for bad debts | 37,043 | |
Loss on sale of assets | 14,206 | $ 80,595 |
Stock issued for services | 326,019 | 606,536 |
Fair market value of warrants and stock options granted | 145,716 | 311,244 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 111,967 | (2,279,774) |
Accounts receivable - related party | (2,383,828) | 40,907 |
Revenues in excess of billing | 535,937 | (765,672) |
Other current assets | (758,802) | 286,838 |
Accounts payable and accrued expenses | 142,008 | 59 |
Unearned revenue | (1,190,072) | 4,857,469 |
Net cash provided by operating activities | 2,031,618 | 4,024,142 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,177,443) | (1,772,866) |
Sales of property and equipment | 357,933 | 179,904 |
Purchase of non-controlling interest in subsidiaries | (347,623) | (577,222) |
Net cash used in investing activities | (1,167,133) | (2,170,184) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 64,931 | 1,610,000 |
Proceeds from the exercise of stock options and warrants | $ 194,680 | 116,400 |
Restricted cash | 2,438,844 | |
Dividend paid by subsidiary to non-controlling interest | (780,106) | |
Proceeds from bank loans | $ 306,750 | 57,405 |
Payments on capital lease obligations and loans - net | (530,733) | (2,867,974) |
Net cash provided by financing activities | 35,628 | 574,569 |
Effect of exchange rate changes | (1,082,297) | (404,696) |
Net increase (decrease) in cash and cash equivalents | (182,184) | 2,023,831 |
Cash and cash equivalents, beginning of the period | 14,168,957 | 11,462,695 |
Cash and cash equivalents, end of period | 13,986,773 | 13,486,526 |
Cash paid during the period for: | ||
Interest | 132,764 | 107,418 |
Taxes | $ 156,737 | $ 74,850 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 6 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | NOTE 1 BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The Company designs, develops, markets, and exports proprietary software products to customers in the automobile financing and leasing, banking, healthcare, and financial services industries worldwide. The Company also provides system integration, consulting, and IT products and services in exchange for fees from customers. The consolidated condensed interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Companys annual report on Form 10-K for the year ended June 30, 2015. The Company follows the same accounting policies in preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. The accompanying condensed consolidated financial statements include the accounts of NetSol Technologies, Inc. and subsidiaries (collectively, the Company) as follows: Wholly owned Subsidiaries NTPK (Thailand) Co. Limited (NTPK Thailand) NetSol Technologies Thailand Limited (NetSol Thai) NetSol Technologies (Beijing) Co. Ltd. (NetSol Beijing) NetSol Omni (Private) Ltd. (Omni) NetSol Technologies (GmbH) (NTG) Majority-owned Subsidiaries For comparative purposes, prior years condensed consolidated financial statements have been reclassified to conform to report classifications of the current year. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Accounting Policies | NOTE 2 ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the Unites States. Balances at financial institutions within certain foreign countries are not covered by insurance. As of December 31, 2015 and June 30, 2015, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $11,474,155 and $8,969,443, respectively. The Company has not experienced any losses in such accounts. The Companys operations are carried out globally. Accordingly, the Companys business, financial condition and results of operations may be influenced by the political, economic and legal environments of each country and by the general state of the countrys economy. The Companys operations in each foreign country are subject to specific considerations and significant risks not typically associated with companies in economically developed nations. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Companys results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Also, due to the current economic conditions in China and challenges being faced by the Chinese economy, the Company may face a risk of reduction in future revenue growth and non-collection of receivables from the customers in China. New Accounting Pronouncements In May 2014, the (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standards core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of the new revenue standard by one year, which will make it effective for the Company in the first quarter of its fiscal year ending June 30, 2019. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the impact of adopting ASU 2014-12 on the Companys results of operations or financial condition. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern(ASU 2014-15). The guidance in ASU 2014-15 sets forth managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entitys ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that managements plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Companys consolidated financial statements. In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income Statement Extraordinary and Unusual items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01). The amendment eliminates from U.S. GAAP the concept of extraordinary items. This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted and allows the Company to apply the amendment prospectively or retrospectively. The adoption of this guidance is not expected to have a material impact on the Companys consolidated financial statements. In February 2015, FASB issued ASU No. 2015-02, (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 provides amendments to respond to stakeholders concerns about the current accounting for consolidation of certain legal entities. Stakeholders expressed concerns that GAAP might require a reporting entity to consolidate another legal entity in situations in which the reporting entitys contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entitys voting rights, or the reporting entity is not exposed to a majority of the legal entitys economic benefits or obligations. ASU No. 2015-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this guidance is not expected to have a material impact on the Companys results of operations, financial position or disclosures. In April 2015, FASB issued ASU No. 2015-03, (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In April 2015, FASB issued ASU No. 2015-05, (Subtopic 350-40): Customers Accounting for Fees Paid in a Cloud Computing Arrangements. In September 2015, the Financial Accounting Standards Board (FASB) issued ASU No. 2015-16, Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which changes how deferred taxes are classified on the balance sheet and is effective for financial statements issued for annual periods beginning after December 15, 2016, with early adoption permitted. ASU 2015-17 requires all deferred tax assets and liabilities to be classified as non-current. The adoption of this guidance is not expected to have a material impact on the Companys results of operations, financial position or disclosures. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income and updates certain presentation and disclosure requirements. ASU 2016-01 is effective beginning after December 15, 2017. The adoption of this guidance is not expected to have a material impact on the Companys results of operations, financial position or disclosures. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2015 | |
Net income (loss) per common share | |
Earnings Per Share | NOTE 3 EARNINGS PER SHARE Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, warrants, and stock awards. The components of basic and diluted earnings per share were as follows: For the three months ended December 31, 2015 For the six months ended December 31, 2015 Net Income Shares Per Share Net Income Shares Per Share Basic income per share: Net income available to common shareholders $ 875,065 10,308,186 $ 0.08 $ 464,037 10,294,760 $ 0.05 Effect of dilutive securities Stock options - 237,618 - - 237,618 - Warrants - 3,118 - - 3,118 - Diluted income per share $ 875,065 10,548,922 $ 0.08 $ 464,037 10,535,496 $ 0.04 For the three months ended December 31, 2014 For the six months ended December 31, 2014 Net Loss Shares Per Share Net Loss Shares Per Share Basic loss per share: Net loss available to common shareholders $ (1,367,166 ) 9,654,334 $ (0.14 ) $ (3,205,195 ) 9,433,829 $ (0.34 ) Effect of dilutive securities Stock options - - - - - Warrants - - - - - Diluted loss per share $ (1,367,166 ) 9,654,334 $ (0.14 ) $ (3,205,195 ) 9,433,829 $ (0.34 ) The following potential dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive. For the Three Months For the Six Months Ended December 31, Ended December 31, 2015 2014 2015 2014 Stock Options - 727,462 - 727,462 Warrants - 163,124 - 163,124 - 890,586 - 890,586 |
Other Comprehensive Income and
Other Comprehensive Income and Foreign Currency | 6 Months Ended |
Dec. 31, 2015 | |
Other Comprehensive Income And Foreign Currency [Abstract] | |
Other Comprehensive Income and Foreign Currency | NOTE 4 OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY: The accounts of NTE, NetSol UK, VLSH and VLS use the British Pound; VLSIL and NTG use the Euro; NetSol PK, Connect, Omni and NetSol Innovation use the Pakistan Rupee; NTPK Thailand and NetSol Thai use the Thai Baht; Australia uses the Australian dollar; and NetSol Beijing uses the Chinese Yuan as the functional currencies. NetSol Technologies, Inc., and its subsidiary, NTA, use the U.S. dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. Accumulated translation losses classified as an item of accumulated other comprehensive loss in the stockholders equity section of the consolidated balance sheet were $18,546,296 and $17,167,100 as of December 31, 2015 and June 30, 2015, respectively. During the three and six months ended December 31, 2015, comprehensive income (loss) in the consolidated statements of operations included translation loss of $415,996 and $1,379,196, respectively. During the three and six months ended December 31, 2014, comprehensive income (loss) in the consolidated statements of operations included translation income of $726,129 and a loss of $1,229,425, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 RELATED PARTY TRANSACTIONS NetSol-Innovation In November 2004, the Company entered into a joint venture agreement with the Innovation Group called NetSol-Innovation (Pvt) Ltd., (NetSol-Innovation), a Pakistani company. NetSol-Innovation provides support services to the Innovation Group. During the three and six months ended December 31, 2015, NetSol-Innovation provided services of $2,128,727 and $4,026,526, respectively. During the three and six months ended December 31, 2014, NetSol-Innovation provided services of $1,354,476 and $2,750,476, respectively. Accounts receivable at December 31, 2015 and June 30, 2015 were $5,364,128 and $3,226,733, respectively. Investec Asset Finance In October 2011, NTE entered into an agreement with the Investec Asset Finance to acquire VLS. NTE and VLS both provide support services to Investec. During the three and six months ended December 31, 2015, NTE and VLS provided maintenance and services of $538,703 and $986,543, respectively. During the three and six months ended December 31, 2014, NTE and VLS provided maintenance and services of $242,704 and $531,694, respectively. Accounts receivable at December 31, 2015 and June 30, 2015 were $385,395 and $265,166, respectively. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 6 OTHER CURRENT ASSETS Other current assets consisted of the following: As of As of December 31, 2015 June 30, 2015 Prepaid Expenses $ 472,452 $ 452,314 Advance Income Tax 1,002,013 895,075 Employee Advances 121,247 36,816 Security Deposits 201,518 195,336 Tender Money Receivable 33,086 26,435 Other Receivables 556,519 322,647 Other Assets 284,778 83,567 Total $ 2,671,613 $ 2,012,190 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 7 PROPERTY AND EQUIPMENT Property and equipment consisted of the following: As of As of December 31, 2015 June 30, 2015 Office Furniture and Equipment $ 3,203,248 $ 3,104,375 Computer Equipment 25,545,848 25,911,422 Assets Under Capital Leases 1,859,806 1,887,767 Building 8,717,470 8,743,130 Land 2,393,866 2,451,577 Capital Work In Progress 162,274 392,243 Autos 981,035 943,873 Improvements 382,451 204,779 Subtotal 43,245,998 43,639,166 Accumulated Depreciation (19,994,078 ) (18,519,532 ) Property and Equipment, Net $ 23,251,920 $ 25,119,634 For the three and six months ended December 31, 2015, depreciation expense totaled $1,060,216 and $2,124,105, respectively. Of these amounts, $774,600 and $1,547,317, respectively, are reflected in cost of revenues. For the three and six months ended December 31, 2014, depreciation expense totaled $1,360,652 and $2,729,359, respectively. Of these amounts, $932,063 and $1,850,955, respectively, are reflected in cost of revenues. Following is a summary of fixed assets held under capital leases as of December 31, 2015 and June 30, 2015: As of As of December 31, 2015 June 30, 2015 Computers and Other Equipment $ 520,993 $ 590,625 Furniture and Fixtures 405,809 414,023 Vehicles 933,004 883,119 Total 1,859,806 1,887,767 Less: Accumulated Depreciation - Net (600,457 ) (577,215 ) $ 1,259,349 $ 1,310,552 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 8 INTANGIBLE ASSETS Intangible assets consisted of the following: As of As of December 31, 2015 June 30, 2015 Product Licenses - Cost $ 48,632,368 $ 48,632,368 Additions - - Effect of Translation Adjustment (3,295,489 ) (2,325,008 ) Accumulated Amortization (24,459,168 ) (23,491,893 ) Net Balance $ 20,877,711 $ 22,815,467 (A) Product Licenses Product licenses include internally developed original license issues, renewals, enhancements, copyrights, trademarks, and trade names. Product licenses are amortized on a straight-line basis over their respective lives, and the unamortized amount of $20,877,711 will be amortized over the next 8.25 years. Amortization expense for the three and six months ended December 31, 2015 was $686,866 and $1,388,384, respectively. Amortization expense for the three and six months ended December 31, 2014 was $868,690 and $1,751,365, respectively. (B) Future Amortization Estimated amortization expense of intangible assets over the next five years is as follows: Year ended: December 31, 2016 $ 2,738,817 December 31, 2017 2,738,817 December 31, 2018 2,738,817 December 31, 2019 2,738,817 December 31, 2020 2,738,817 Thereafter 7,183,626 $ 20,877,711 |
Goodwill
Goodwill | 6 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 9 GOODWILL Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in businesses combinations. Goodwill was comprised of the following amounts: As of As of December 31, 2015 June 30, 2015 NetSol PK $ 1,166,610 $ 1,166,610 NTE 3,471,814 3,471,814 VLS 214,044 214,044 NTA 4,664,100 4,664,100 Total $ 9,516,568 $ 9,516,568 The Company tests for goodwill impairment at each reporting unit. There was no goodwill impairment for the period ended December 31, 2015. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 10 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of As of December 31, 2015 June 30, 2015 Accounts Payable $ 1,346,547 $ 1,514,841 Accrued Liabilities 4,006,593 3,978,435 Accrued Payroll 9,682 8,974 Accrued Payroll Taxes 250,040 282,572 Interest Payable 32,091 41,556 Taxes Payable 158,924 22,957 Other Payable 103,226 103,226 Total $ 5,907,103 $ 5,952,561 |
Debts
Debts | 6 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debts | NOTE 11 DEBTS Notes payable and capital leases consisted of the following: As of December 31, 2015 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 89,741 $ 89,741 $ - HSBC Loan (2) 264,135 264,135 - Loan Payable Bank (3) 2,824,859 2,824,859 - Loan From Related Party (4) 128,647 128,647 - 3,307,382 3,307,382 - Subsidiary Capital Leases (5) 732,920 459,811 273,109 $ 4,040,302 $ 3,767,193 $ 273,109 As of June 30, 2015 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 79,872 $ 79,872 $ - HSBC Loan (2) 447,161 322,349 124,812 Loan Payable Bank (3) 2,892,961 2,892,961 - Loan From Related Party (4) 129,979 129,979 - 3,549,973 3,425,161 124,812 Subsidiary Capital Leases (5) 833,872 471,192 362,680 $ 4,383,845 $ 3,896,353 $ 487,492 (1) The Company finances Directors and Officers (D&O) liability insurance as well as Errors and Omissions (E&O) liability insurance, for which the total balances are renewed on an annual basis and as such are recorded in current maturities. The interest rate on the insurance financing was 0.35% and 0.49% as of December 31, 2015 and June 30, 2015, respectively. (2) In October 2011, the Companys subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% of a controlling interest in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,480,166 for a period of 5 years with monthly payments of £18,420, or approximately $27,265. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against a debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the three and six months ended December 31, 2015 was $1,161 and $9,011, respectively. Interest expense for the three and six months ended December 31, 2014 was $13,248 and $29,950, respectively. This facility requires that NTEs adjusted tangible net worth would not be less than £600,000. For this purpose, adjusted tangible net worth means shareholders funds less intangible assets plus non-redeemable preference shares. In addition, NTEs cash debt service coverage would not fall below 150% of the aggregate debt service cost. As of December 31, 2015, NTE was in compliance with this covenant. (3) The Companys subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PKs assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 300,000,000 or approximately $2,824,859. The interest rate for the loans was 4.5% and 7.5% at December 31, 2015 and June 30, 2015, respectively. Interest expense for the three and six months ended December 31, 2015 was $36,980 and $77,986, respectively. Interest expense for the three and six months ended December 31, 2014 was $37,068 and $72,775, respectively. Export refinance facility from Askari Bank Limited amounting to Rupees 300 million ($2.82 million) require NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of December 31, 2015, NetSol PK was in compliance with this covenant. (4) In March 2014, the Companys subsidiary, VLS, entered into a loan agreement with Investec. The loan amount was £150,000, or approximately $222,025, for a period of two years with annual payments of £75,000, or approximately $111,012. The interest rate was 3.13%. As of December 31, 2015, VLS has used this facility up to $128,647 including interest due, and was shown as a current maturity. (5) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are secured by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the three and six months ended December 31, 2015 and 2014. Following is the aggregate minimum future lease payments under capital leases as of December 31, 2015: Amount Minimum Lease Payments Due FYE 12/31/16 $ 505,924 Due FYE 12/31/17 225,972 Due FYE 12/31/18 62,725 Total Minimum Lease Payments 794,621 Interest Expense relating to future periods (61,701 ) Present Value of minimum lease payments 732,920 Less: Current portion (459,811 ) Non-Current portion $ 273,109 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 12 STOCKHOLDERS EQUITY During the six months ended December 31, 2015, the Company issued 22,500 shares of common stock for services rendered by officers and employees of the Company. These shares were valued at the fair market value of $118,025. During the six months ended December 31, 2015, the Company issued 15,000 shares of common stock for services rendered by the independent members of the Board of Directors as part of their board compensation. These shares were valued at the fair market value of $76,352. During the six months ended December 31, 2015, the Company issued 26,000 shares of its common stock to employees pursuant to the terms of their employment agreements valued at $131,642. |
Incentive and Non-Statutory Sto
Incentive and Non-Statutory Stock Option Plan | 6 Months Ended |
Dec. 31, 2015 | |
Incentive And Non-statutory Stock Option Plan | |
Incentive and Non-Statutory Stock Option Plan | NOTE 13 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN Common stock purchase options and warrants consisted of the following: # of shares Weighted Ave Exericse Price Weighted Average Remaining Contractual Life (in years) Aggregated Intrinsic Value OPTIONS: Outstanding and exercisable, June 30, 2015 708,133 $ 6.84 1.22 $ 572,352 Granted 152,024 $ 4.50 Exercised (47,024 ) $ 4.14 Expired / Cancelled (11,000 ) $ 23.41 Outstanding and exercisable, December 31, 2015 802,133 $ 6.33 0.69 $ 2,141,466 WARRANTS: Outstanding and exercisable, June 30, 2015 163,124 $ 7.29 1.22 $ - Granted / adjusted - - Exercised - - Expired - - Outstanding and exercisable, December 31, 2015 163,124 $ 7.29 0.72 $ 30,567 The following table summarizes information about stock options and warrants outstanding and exercisable at December 31, 2015. Exercise Price Number Weighted Weighted OPTIONS: $0.10 - $9.90 739,133 0.71 $ 4.82 $10.00 - $19.90 8,000 0.58 $ 17.69 $20.00 - $29.90 55,000 0.42 $ 25.00 Totals 802,133 0.69 $ 6.33 WARRANTS: $5.00 - $7.50 163,124 0.72 $ 7.29 Totals 163,124 0.72 $ 7.29 The following table summarizes stock grants awarded as compensation: # of shares Weighted Unvested, June 30, 2014 232,000 $ 3.88 Granted 113,275 $ 3.26 Vested (338,608 ) $ 3.60 Unvested, June 30, 2015 6,667 $ 6.00 Granted 254,000 $ 5.06 Vested (63,500 ) $ 5.13 Unvested, December 31, 2015 197,167 $ 5.07 For the three and six months ended December 31, 2015, the Company recorded compensation expense of $248,268 and $326,019 respectively. For the three and six months ended December 31, 2014, the Company recorded compensation expense of $316,370 and $614,293 respectively. The compensation expense related to the unvested stock grants as of December 31 OPTIONS During the six months ended December 31, 2015, the Company granted 152,024 options to employees with exercise prices of $4.14 to $4.92 per share and expiration date of 3 to 5 months, vesting immediately. Using the Black-Scholes method to value the options, the Company recorded $145,716 in compensation expense for these options in the accompanying condensed consolidated financial statements. The fair market value was calculated using the Black-Scholes option pricing model with the following assumptions: ● Risk-free interest rate - 0.01% - 0.02% ● Expected life 3 months - 5 months ● Expected volatility 41.65% - 47.89% ● Expected dividend - 0% |
Contingencies
Contingencies | 6 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | NOTE 14 CONTINGENCIES As previously disclosed, on July 25, 2014, purported class action lawsuits were filed in the U.S. District Court for the Central District of California against the Company and certain of its current or former officers and/or directors, which have been consolidated under the caption Rand-Heart of New York, Inc. v. NetSol Technologies, Inc., et al. The Company continues to believe that plaintiffs remaining allegations are meritless and intends to vigorously defend all claims asserted. The Company has engaged counsel and has liability insurance. Given the early stage of the litigation, however, at this time the Company is unable to form a professional judgment that an unfavorable outcome is either probable or remote, and it is not possible to assess whether or not the outcome of these proceedings will or will not have a material adverse effect on the Company. On October 27, 2015, a shareholder derivative lawsuit was filed in the California state court entitled McArthur v Ghauri, et al. Paulovits v. Ghauri, et al. On January 20, 2016, the parties agreed in principle to settle this class action. Such settlement is in the process of being documented and is subject to the Courts approval. The Company expects the cost of settlement to be fully covered by its insurers. |
Operating Segments
Operating Segments | 6 Months Ended |
Dec. 31, 2015 | |
Operating Segments | |
Operating Segments | NOTE 15 OPERATING SEGMENTS The Company has identified three segments for its products and services; North America, Europe and Asia-Pacific. Our reportable segments are business units located in different global regions. Each business unit provides similar products and services; license fees for leasing and asset-based software, related maintenance fees, and implementation and IT consulting services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. The following table presents a summary of identifiable assets as of December 31, 2015 and June 30, 2015: As of As of December 31, 2015 June 30, 2015 Identifiable assets: Corporate headquarters $ 2,667,751 $ 4,896,334 North America 6,175,310 7,162,846 Europe 7,050,518 6,631,945 Asia - Pacific 71,337,431 70,271,209 Consolidated $ 87,231,010 $ 88,962,334 The following table presents a summary of operating information for the three and six months ended December 31: For the Three Months For the Six Months Ended December 31, Ended December 31, 2015 2014 2015 2014 Revenues from unaffiliated customers: North America $ 952,738 $ 1,423,560 $ 2,455,206 $ 2,590,337 Europe 1,679,224 1,678,892 3,177,755 3,239,915 Asia - Pacific 10,892,305 7,652,972 18,850,771 13,467,333 13,524,267 10,755,424 24,483,732 19,297,585 Revenue from affiliated customers Europe 538,703 242,704 986,543 531,694 Asia - Pacific 2,128,727 1,354,476 4,026,526 2,750,476 2,667,430 1,597,180 5,013,069 3,282,170 Consolidated $ 16,191,697 $ 12,352,604 $ 29,496,801 $ 22,579,755 Intercompany revenue Europe $ 105,707 $ 92,641 $ 242,493 $ 223,169 Asia - Pacific 2,115,420 1,410,145 3,059,609 1,691,264 Eliminated $ 2,221,127 $ 1,502,786 $ 3,302,102 $ 1,914,433 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,116,822 ) $ (791,128 ) $ (1,830,472 ) $ (843,040 ) North America (332,899 ) 282,475 43,815 (79,027 ) Europe 35,530 (388,162 ) (159,051 ) (1,003,425 ) Asia - Pacific 3,172,652 (609,115 ) 3,484,643 (1,809,664 ) Consolidated $ 1,758,461 $ (1,505,930 ) $ 1,538,935 $ (3,735,156 ) The following table presents a summary of capital expenditures for the six months ended December 31: For the Six Months Ended December 31, 2015 2014 Capital expenditures: Corporate headquarters $ - $ 1,786 North America 44,679 4,866 Europe 63,222 155,895 Asia - Pacific 1,069,542 1,610,319 Consolidated $ 1,177,443 $ 1,772,866 |
Non-Controlling Interest in Sub
Non-Controlling Interest in Subsidiary | 6 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interest in Subsidiary | NOTE 16 NON-CONTROLLING INTEREST IN SUBSIDIARY The Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows: SUBSIDIARY Non Controlling Interest % Non-Controlling Interest at December 31, 2015 NetSol PK 34.15 % $ 10,823,064 NetSol-Innovation 49.90 % 2,923,743 VLS, VLSH & VLSIL Combined 49.00 % 270,150 Total $ 14,016,957 SUBSIDIARY Non Controlling Interest % Non-Controlling Interest at June 30, 2015 NetSol PK 34.90 % $ 11,411,954 NetSol-Innovation 49.90 % 2,035,548 VLS, VLHS & VLSIL Combined 49.00 % 393,139 Total $ 13,840,641 NETSOL TECHNOLOGIES, LIMITED During the six months ended December 31, 2015, the Company purchased 669,000 shares of common stock of NetSol PK from the open market for $347,623 resulting in a decrease in non-controlling interest from 34.90% to 34.15%. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the Unites States. Balances at financial institutions within certain foreign countries are not covered by insurance. As of December 31, 2015 and June 30, 2015, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $11,474,155 and $8,969,443, respectively. The Company has not experienced any losses in such accounts. The Companys operations are carried out globally. Accordingly, the Companys business, financial condition and results of operations may be influenced by the political, economic and legal environments of each country and by the general state of the countrys economy. The Companys operations in each foreign country are subject to specific considerations and significant risks not typically associated with companies in economically developed nations. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Companys results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Also, due to the current economic conditions in China and challenges being faced by the Chinese economy, the Company may face a risk of reduction in future revenue growth and non-collection of receivables from the customers in China. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standards core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of the new revenue standard by one year, which will make it effective for the Company in the first quarter of its fiscal year ending June 30, 2019. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the impact of adopting ASU 2014-12 on the Companys results of operations or financial condition. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern(ASU 2014-15). The guidance in ASU 2014-15 sets forth managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entitys ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that managements plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Companys consolidated financial statements. In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income Statement Extraordinary and Unusual items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01). The amendment eliminates from U.S. GAAP the concept of extraordinary items. This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted and allows the Company to apply the amendment prospectively or retrospectively. The adoption of this guidance is not expected to have a material impact on the Companys consolidated financial statements. In February 2015, FASB issued ASU No. 2015-02, (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 provides amendments to respond to stakeholders concerns about the current accounting for consolidation of certain legal entities. Stakeholders expressed concerns that GAAP might require a reporting entity to consolidate another legal entity in situations in which the reporting entitys contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entitys voting rights, or the reporting entity is not exposed to a majority of the legal entitys economic benefits or obligations. ASU No. 2015-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this guidance is not expected to have a material impact on the Companys results of operations, financial position or disclosures. In April 2015, FASB issued ASU No. 2015-03, (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In April 2015, FASB issued ASU No. 2015-05, (Subtopic 350-40): Customers Accounting for Fees Paid in a Cloud Computing Arrangements. In September 2015, the Financial Accounting Standards Board (FASB) issued ASU No. 2015-16, Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which changes how deferred taxes are classified on the balance sheet and is effective for financial statements issued for annual periods beginning after December 15, 2016, with early adoption permitted. ASU 2015-17 requires all deferred tax assets and liabilities to be classified as non-current. The adoption of this guidance is not expected to have a material impact on the Companys results of operations, financial position or disclosures. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income and updates certain presentation and disclosure requirements. ASU 2016-01 is effective beginning after December 15, 2017. The adoption of this guidance is not expected to have a material impact on the Companys results of operations, financial position or disclosures. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Net income (loss) per common share | |
Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings per share were as follows: For the three months ended December 31, 2015 For the six months ended December 31, 2015 Net Income Shares Per Share Net Income Shares Per Share Basic income per share: Net income available to common shareholders $ 875,065 10,308,186 $ 0.08 $ 464,037 10,294,760 $ 0.05 Effect of dilutive securities Stock options - 237,618 - - 237,618 - Warrants - 3,118 - - 3,118 - Diluted income per share $ 875,065 10,548,922 $ 0.08 $ 464,037 10,535,496 $ 0.04 For the three months ended December 31, 2014 For the six months ended December 31, 2014 Net Loss Shares Per Share Net Loss Shares Per Share Basic loss per share: Net loss available to common shareholders $ (1,367,166 ) 9,654,334 $ (0.14 ) $ (3,205,195 ) 9,433,829 $ (0.34 ) Effect of dilutive securities Stock options - - - - - Warrants - - - - - Diluted loss per share $ (1,367,166 ) 9,654,334 $ (0.14 ) $ (3,205,195 ) 9,433,829 $ (0.34 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive. For the Three Months For the Six Months Ended December 31, Ended December 31, 2015 2014 2015 2014 Stock Options - 727,462 - 727,462 Warrants - 163,124 - 163,124 - 890,586 - 890,586 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following: As of As of December 31, 2015 June 30, 2015 Prepaid Expenses $ 472,452 $ 452,314 Advance Income Tax 1,002,013 895,075 Employee Advances 121,247 36,816 Security Deposits 201,518 195,336 Tender Money Receivable 33,086 26,435 Other Receivables 556,519 322,647 Other Assets 284,778 83,567 Total $ 2,671,613 $ 2,012,190 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: As of As of December 31, 2015 June 30, 2015 Office Furniture and Equipment $ 3,203,248 $ 3,104,375 Computer Equipment 25,545,848 25,911,422 Assets Under Capital Leases 1,859,806 1,887,767 Building 8,717,470 8,743,130 Land 2,393,866 2,451,577 Capital Work In Progress 162,274 392,243 Autos 981,035 943,873 Improvements 382,451 204,779 Subtotal 43,245,998 43,639,166 Accumulated Depreciation (19,994,078 ) (18,519,532 ) Property and Equipment, Net $ 23,251,920 $ 25,119,634 |
Summary of Fixed Assets Held Under Capital Leases | Following is a summary of fixed assets held under capital leases as of December 31, 2015 and June 30, 2015: As of As of December 31, 2015 June 30, 2015 Computers and Other Equipment $ 520,993 $ 590,625 Furniture and Fixtures 405,809 414,023 Vehicles 933,004 883,119 Total 1,859,806 1,887,767 Less: Accumulated Depreciation - Net (600,457 ) (577,215 ) $ 1,259,349 $ 1,310,552 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: As of As of December 31, 2015 June 30, 2015 Product Licenses - Cost $ 48,632,368 $ 48,632,368 Additions - - Effect of Translation Adjustment (3,295,489 ) (2,325,008 ) Accumulated Amortization (24,459,168 ) (23,491,893 ) Net Balance $ 20,877,711 $ 22,815,467 |
Estimated Amortization Expense of Intangible Assets Over Next Five Years | Estimated amortization expense of intangible assets over the next five years is as follows: Year ended: December 31, 2016 $ 2,738,817 December 31, 2017 2,738,817 December 31, 2018 2,738,817 December 31, 2019 2,738,817 December 31, 2020 2,738,817 Thereafter 7,183,626 $ 20,877,711 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Acquired | Goodwill was comprised of the following amounts: As of As of December 31, 2015 June 30, 2015 NetSol PK $ 1,166,610 $ 1,166,610 NTE 3,471,814 3,471,814 VLS 214,044 214,044 NTA 4,664,100 4,664,100 Total $ 9,516,568 $ 9,516,568 |
Accounts Payable and Accrued 29
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: As of As of December 31, 2015 June 30, 2015 Accounts Payable $ 1,346,547 $ 1,514,841 Accrued Liabilities 4,006,593 3,978,435 Accrued Payroll 9,682 8,974 Accrued Payroll Taxes 250,040 282,572 Interest Payable 32,091 41,556 Taxes Payable 158,924 22,957 Other Payable 103,226 103,226 Total $ 5,907,103 $ 5,952,561 |
Debts (Tables)
Debts (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Components of Notes Payable and Capital Leases | Notes payable and capital leases consisted of the following: As of December 31, 2015 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 89,741 $ 89,741 $ - HSBC Loan (2) 264,135 264,135 - Loan Payable Bank (3) 2,824,859 2,824,859 - Loan From Related Party (4) 128,647 128,647 - 3,307,382 3,307,382 - Subsidiary Capital Leases (5) 732,920 459,811 273,109 $ 4,040,302 $ 3,767,193 $ 273,109 As of June 30, 2015 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 79,872 $ 79,872 $ - HSBC Loan (2) 447,161 322,349 124,812 Loan Payable Bank (3) 2,892,961 2,892,961 - Loan From Related Party (4) 129,979 129,979 - 3,549,973 3,425,161 124,812 Subsidiary Capital Leases (5) 833,872 471,192 362,680 $ 4,383,845 $ 3,896,353 $ 487,492 (1) The Company finances Directors and Officers (D&O) liability insurance as well as Errors and Omissions (E&O) liability insurance, for which the total balances are renewed on an annual basis and as such are recorded in current maturities. The interest rate on the insurance financing was 0.35% and 0.49% as of December 31, 2015 and June 30, 2015, respectively. (2) In October 2011, the Companys subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% of a controlling interest in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,480,166 for a period of 5 years with monthly payments of £18,420, or approximately $27,265. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against a debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the three and six months ended December 31, 2015 was $1,161 and $9,011, respectively. Interest expense for the three and six months ended December 31, 2014 was $13,248 and $29,950, respectively. This facility requires that NTEs adjusted tangible net worth would not be less than £600,000. For this purpose, adjusted tangible net worth means shareholders funds less intangible assets plus non-redeemable preference shares. In addition, NTEs cash debt service coverage would not fall below 150% of the aggregate debt service cost. As of December 31, 2015, NTE was in compliance with this covenant. (3) The Companys subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PKs assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 300,000,000 or approximately $2,824,859. The interest rate for the loans was 4.5% and 7.5% at December 31, 2015 and June 30, 2015, respectively. Interest expense for the three and six months ended December 31, 2015 was $36,980 and $77,986, respectively. Interest expense for the three and six months ended December 31, 2014 was $37,068 and $72,775, respectively. Export refinance facility from Askari Bank Limited amounting to Rupees 300 million ($2.82 million) require NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of December 31, 2015, NetSol PK was in compliance with this covenant. (4) In March 2014, the Companys subsidiary, VLS, entered into a loan agreement with Investec. The loan amount was £150,000, or approximately $222,025, for a period of two years with annual payments of £75,000, or approximately $111,012. The interest rate was 3.13%. As of December 31, 2015, VLS has used this facility up to $128,647 including interest due, and was shown as a current maturity. (5) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are secured by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the three and six months ended December 31, 2015 and 2014. |
Schedule of Aggregate Minimum Future Lease Payments Under Capital Leases | Following is the aggregate minimum future lease payments under capital leases as of December 31, 2015: Amount Minimum Lease Payments Due FYE 12/31/16 $ 505,924 Due FYE 12/31/17 225,972 Due FYE 12/31/18 62,725 Total Minimum Lease Payments 794,621 Interest Expense relating to future periods (61,701 ) Present Value of minimum lease payments 732,920 Less: Current portion (459,811 ) Non-Current portion $ 273,109 |
Incentive and Non-Statutory S31
Incentive and Non-Statutory Stock Option Plan (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Incentive And Non-statutory Stock Option Plan | |
Schedule of Common Stock Purchase Options and Warrants | Common stock purchase options and warrants consisted of the following: # of shares Weighted Ave Exericse Price Weighted Average Remaining Contractual Life (in years) Aggregated Intrinsic Value OPTIONS: Outstanding and exercisable, June 30, 2015 708,133 $ 6.84 1.22 $ 572,352 Granted 152,024 $ 4.50 Exercised (47,024 ) $ 4.14 Expired / Cancelled (11,000 ) $ 23.41 Outstanding and exercisable, December 31, 2015 802,133 $ 6.33 0.69 $ 2,141,466 WARRANTS: Outstanding and exercisable, June 30, 2015 163,124 $ 7.29 1.22 $ - Granted / adjusted - - Exercised - - Expired - - Outstanding and exercisable, December 31, 2015 163,124 $ 7.29 0.72 $ 30,567 |
Summary of Stock Options and Warrants Outstanding and Exercisable | The following table summarizes information about stock options and warrants outstanding and exercisable at December 31, 2015. Exercise Price Number Outstanding and Exercisable Weighted Average Remaining Contractual Life Weighted Ave Exercise Price OPTIONS: $0.10 - $9.90 739,133 0.71 $ 4.82 $10.00 - $19.90 8,000 0.58 $ 17.69 $20.00 - $29.90 55,000 0.42 $ 25.00 Totals 802,133 0.69 $ 6.33 WARRANTS: $5.00 - $7.50 163,124 0.72 $ 7.29 Totals 163,124 0.72 $ 7.29 |
Summary of Unvested Stock Grants Awarded as Compensation | The following table summarizes stock grants awarded as compensation: # of shares Weighted Unvested, June 30, 2014 232,000 $ 3.88 Granted 113,275 $ 3.26 Vested (338,608 ) $ 3.60 Unvested, June 30, 2015 6,667 $ 6.00 Granted 254,000 $ 5.06 Vested (63,500 ) $ 5.13 Unvested, December 31, 2015 197,167 $ 5.07 |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summary of Identifiable Assets | The following table presents a summary of identifiable assets as of December 31, 2015 and June 30, 2015: As of As of December 31, 2015 June 30, 2015 Identifiable assets: Corporate headquarters $ 2,667,751 $ 4,896,334 North America 6,175,310 7,162,846 Europe 7,050,518 6,631,945 Asia - Pacific 71,337,431 70,271,209 Consolidated $ 87,231,010 $ 88,962,334 |
Summary of Operating Information | The following table presents a summary of operating information for the three and six months ended December 31: For the Three Months For the Six Months Ended December 31, Ended December 31, 2015 2014 2015 2014 Revenues from unaffiliated customers: North America $ 952,738 $ 1,423,560 $ 2,455,206 $ 2,590,337 Europe 1,679,224 1,678,892 3,177,755 3,239,915 Asia - Pacific 10,892,305 7,652,972 18,850,771 13,467,333 13,524,267 10,755,424 24,483,732 19,297,585 Revenue from affiliated customers Europe 538,703 242,704 986,543 531,694 Asia - Pacific 2,128,727 1,354,476 4,026,526 2,750,476 2,667,430 1,597,180 5,013,069 3,282,170 Consolidated $ 16,191,697 $ 12,352,604 $ 29,496,801 $ 22,579,755 Intercompany revenue Europe $ 105,707 $ 92,641 $ 242,493 $ 223,169 Asia - Pacific 2,115,420 1,410,145 3,059,609 1,691,264 Eliminated $ 2,221,127 $ 1,502,786 $ 3,302,102 $ 1,914,433 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,116,822 ) $ (791,128 ) $ (1,830,472 ) $ (843,040 ) North America (332,899 ) 282,475 43,815 (79,027 ) Europe 35,530 (388,162 ) (159,051 ) (1,003,425 ) Asia - Pacific 3,172,652 (609,115 ) 3,484,643 (1,809,664 ) Consolidated $ 1,758,461 $ (1,505,930 ) $ 1,538,935 $ (3,735,156 ) |
Summary of Capital Expenditures | The following table presents a summary of capital expenditures for the six months ended December 31: For the Six Months Ended December 31, 2015 2014 Capital expenditures: Corporate headquarters $ - $ 1,786 North America 44,679 4,866 Europe 63,222 155,895 Asia - Pacific 1,069,542 1,610,319 Consolidated $ 1,177,443 $ 1,772,866 |
Non-Controlling Interest in S33
Non-Controlling Interest in Subsidiary (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Balance of Non-Controlling Interest | The Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows: SUBSIDIARY Non Controlling Interest % Non-Controlling Interest at December 31, 2015 NetSol PK 34.15 % $ 10,823,064 NetSol-Innovation 49.90 % 2,923,743 VLS, VLSH & VLSIL Combined 49.00 % 270,150 Total $ 14,016,957 SUBSIDIARY Non Controlling Interest % Non-Controlling Interest at June 30, 2015 NetSol PK 34.90 % $ 11,411,954 NetSol-Innovation 49.90 % 2,035,548 VLS, VLHS & VLSIL Combined 49.00 % 393,139 Total $ 13,840,641 |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Accounting Policies [Abstract] | ||
Uninsured deposits related to cash deposits | $ 11,474,155 | $ 8,969,443 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) per common share | ||||
Net income (loss) available to common shareholders, Net Income | $ 875,065 | $ (1,367,166) | $ 464,037 | $ (3,205,195) |
Net income (loss) available to common shareholders, Shares | 10,308,186 | 9,654,334 | 10,294,760 | 9,433,829 |
Net income (loss) available to common shareholders, Per share | $ 0.08 | $ (0.14) | $ 0.05 | $ (0.34) |
Effect of dilutive securities Stock options | 237,618 | 237,618 | ||
Effect of dilutive securities Warrants | 3,118 | 3,118 | ||
Diluted income (loss) per share, Net Income | $ 875,065 | $ (1,367,166) | $ 464,037 | $ (3,205,195) |
Diluted income (loss) per share, Shares | 10,548,922 | 9,654,334 | 10,535,496 | 9,433,829 |
Diluted income (loss) per share, Per share | $ 0.08 | $ (0.14) | $ 0.04 | $ (0.34) |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Potential dilutive shares | 890,586 | 890,586 | ||
Stock Options [Member] | ||||
Potential dilutive shares | 727,462 | 727,462 | ||
Warrants [Member] | ||||
Potential dilutive shares | 163,124 | 163,124 |
Other Comprehensive Income an37
Other Comprehensive Income and Foreign Currency (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Other Comprehensive Income And Foreign Currency [Abstract] | |||||
Accumulated other comprehensive loss | $ 18,546,296 | $ 18,546,296 | $ 17,167,100 | ||
Comprehensive income (loss) | $ 415,996 | $ 726,129 | $ 1,379,196 | $ 1,229,425 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Services of related parties | $ 2,635,675 | $ 1,543,718 | $ 4,823,083 | $ 3,088,595 | |
Accounts receivable, related parties | 5,749,523 | 5,749,523 | $ 3,491,899 | ||
Net Sol Innovation [Member] | |||||
Services of related parties | 2,128,727 | 1,354,476 | 4,026,526 | 2,750,476 | |
Accounts receivable, related parties | 5,364,128 | 5,364,128 | 3,226,733 | ||
Investec Asset Finance [Member] | |||||
Services of related parties | 538,703 | $ 242,704 | 986,543 | $ 531,694 | |
Accounts receivable, related parties | $ 385,395 | $ 385,395 | $ 265,166 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid Expenses | $ 472,452 | $ 452,314 |
Advance Income Tax | 1,002,013 | 895,075 |
Employee Advances | 121,247 | 36,816 |
Security Deposits | 201,518 | 195,336 |
Tender Money Receivable | 33,086 | 26,435 |
Other Receivables | 556,519 | 322,647 |
Other Assets | 284,778 | 83,567 |
Total | $ 2,671,613 | $ 2,012,190 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,060,216 | $ 1,360,652 | $ 2,124,105 | $ 2,729,359 |
Depreciation reflected in cost of revenues | $ 774,600 | $ 932,063 | $ 1,547,317 | $ 1,850,955 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | $ 43,245,998 | $ 43,639,166 |
Accumulated Depreciation | (19,994,078) | (18,519,532) |
Property and Equipment, Net | 23,251,920 | 25,119,634 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 3,203,248 | 3,104,375 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 25,545,848 | 25,911,422 |
Assets Under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 1,859,806 | 1,887,767 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 8,717,470 | 8,743,130 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 2,393,866 | 2,451,577 |
Capital Work In Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 162,274 | 392,243 |
Autos [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | 981,035 | 943,873 |
Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Subtotal | $ 382,451 | $ 204,779 |
Property and Equipment - Summar
Property and Equipment - Summary of Fixed Assets Held Under Capital Leases (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | $ 1,859,806 | $ 1,887,767 |
Less: Accumulated Depreciation - Net | (600,457) | (577,215) |
Fixed assets held under capital leases, Net | 1,259,349 | 1,310,552 |
Computers And Other Equipment [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | 520,993 | 590,625 |
Furniture and Fixtures [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | 405,809 | 414,023 |
Vehicles [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | $ 933,004 | $ 883,119 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Amortization expenses of intangible assets | $ (24,459,168) | $ (23,491,893) | |||
Product Licenses [Member] | |||||
Finite-lived unamortized amount | $ 20,877,711 | $ 20,877,711 | |||
Finite-lived intangible assets, amortization over period | 8 years 3 months | ||||
Amortization expenses of intangible assets | $ 686,866 | $ 868,690 | $ 1,388,384 | $ 1,751,365 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Product Licenses - Cost - Beginning balance | $ 48,632,368 | $ 48,632,368 |
Additions | ||
Effect of Translation Adjustment | $ (3,295,489) | $ (2,325,008) |
Accumulated Amortization | (24,459,168) | (23,491,893) |
Product Licenses - Cost - Ending balance | $ 20,877,711 | $ 22,815,467 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense of Intangible Assets Over Next Five Years (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
December 31, 2016 | $ 2,738,817 | |
December 31, 2017 | 2,738,817 | |
December 31, 2018 | 2,738,817 | |
December 31, 2019 | 2,738,817 | |
December 31, 2020 | 2,738,817 | |
Thereafter | 7,183,626 | |
Total | $ 20,877,711 | $ 22,815,467 |
Goodwill (Details Narrative)
Goodwill (Details Narrative) | 6 Months Ended |
Dec. 31, 2015USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill impairment |
Goodwill - Summary of Goodwill
Goodwill - Summary of Goodwill Acquired (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Goodwill | $ 9,516,568 | $ 9,516,568 |
NetSol PK [Member] | ||
Goodwill | 1,166,610 | 1,166,610 |
NTE [Member] | ||
Goodwill | 3,471,814 | 3,471,814 |
VLS [Member] | ||
Goodwill | 214,044 | 214,044 |
NTA [Member] | ||
Goodwill | $ 4,664,100 | $ 4,664,100 |
Accounts Payable and Accrued 48
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Payables and Accruals [Abstract] | ||
Accounts Payable | $ 1,346,547 | $ 1,514,841 |
Accrued Liabilities | 4,006,593 | 3,978,435 |
Accrued Payroll | 9,682 | 8,974 |
Accrued Payroll Taxes | 250,040 | 282,572 |
Interest Payable | 32,091 | 41,556 |
Taxes Payable | 158,924 | 22,957 |
Other Payable | 103,226 | 103,226 |
Total | $ 5,907,103 | $ 5,952,561 |
Debts - Components of Notes Pay
Debts - Components of Notes Payable and Capital Leases (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 | |
Total | $ 3,307,382 | $ 3,549,973 | |
Current Maturities | $ 3,307,382 | 3,425,161 | |
Long-Term Maturities | 124,812 | ||
Subsidiary Capital Leases, Current Maturities | $ (459,811) | ||
Subsidiary Capital Leases, Long-Term Maturities | 273,109 | ||
Total | 4,040,302 | 4,383,845 | |
Current Maturities | 3,767,193 | 3,896,353 | |
Long-Term Maturities | 273,109 | 487,492 | |
D & O Insurance [Member] | |||
Total | [1] | 89,741 | 79,872 |
Current Maturities | [1] | $ 89,741 | $ 79,872 |
Long-Term Maturities | [1] | ||
HSBC Loan [Member] | |||
Total | [2] | $ 264,135 | $ 447,161 |
Current Maturities | [2] | $ 264,135 | 322,349 |
Long-Term Maturities | [2] | 124,812 | |
Loan Payable Bank [Member] | |||
Total | [3] | $ 2,824,859 | 2,892,961 |
Current Maturities | [3] | $ 2,824,859 | $ 2,892,961 |
Long-Term Maturities | [3] | ||
Loan From Related Party [Member] | |||
Total | [4] | $ 128,647 | $ 129,979 |
Current Maturities | [4] | $ 128,647 | $ 129,979 |
Long-Term Maturities | [4] | ||
Subsidiary Capital Leases [Member] | |||
Subsidiary Capital Leases, Total | [5] | $ 732,920 | $ 833,872 |
Subsidiary Capital Leases, Current Maturities | [5] | 459,811 | 471,192 |
Subsidiary Capital Leases, Long-Term Maturities | [5] | $ 273,109 | $ 362,680 |
[1] | The Company finances Directors' and Officers' ("D&O") liability insurance as well as Errors and Omissions ("E&O") liability insurance, for which the total balances are renewed on an annual basis and as such are recorded in current maturities. The interest rate on the insurance financing was 0.35% and 0.49% as of December 31, 2015 and June 30, 2015, respectively. | ||
[2] | In October 2011, the Company's subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% of a controlling interest in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,480,166 for a period of 5 years with monthly payments of £18,420, or approximately $27,265. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against a debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the three and six months ended December 31, 2015 was $1,161 and $9,011, respectively. Interest expense for the three and six months ended December 31, 2014 was $13,248 and $29,950, respectively. This facility requires that NTE's adjusted tangible net worth would not be less than £600,000. For this purpose, adjusted tangible net worth means shareholders' funds less intangible assets plus non-redeemable preference shares. In addition, NTE's cash debt service coverage would not fall below 150% of the aggregate debt service cost. As of December 31, 2015, NTE was in compliance with this covenant. | ||
[3] | The Company's subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK's assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 300,000,000 or approximately $2,824,859. The interest rate for the loans was 4.5% and 7.5% at December 31, 2015 and June 30, 2015, respectively. Interest expense for the three and six months ended December 31, 2015 was $36,980 and $77,986, respectively. Interest expense for the three and six months ended December 31, 2014 was $37,068 and $72,775, respectively. Export refinance facility from Askari Bank Limited amounting to Rupees 300 million ($2.82 million) require NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of December 31, 2015, NetSol PK was in compliance with this covenant. | ||
[4] | In March 2014, the Company's subsidiary, VLS, entered into a loan agreement with Investec. The loan amount was £150,000, or approximately $222,025, for a period of two years with annual payments of £75,000, or approximately $111,012. The interest rate was 3.13%. As of December 31, 2015, VLS has used this facility up to $127,584 including interest due, and was shown as a current maturity. | ||
[5] | The Company leases various fixed assets under capital lease arrangements expiring in various years through 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are secured by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the three and six months ended December 31, 2015 and 2014. |
Debts - Components of Notes P50
Debts - Components of Notes Payable and Capital Leases (Details) (Parenthetical) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
Mar. 31, 2014USD ($) | Oct. 31, 2011USD ($) | Oct. 31, 2011GBP (£) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015INR (₨) | Dec. 31, 2014USD ($) | Dec. 31, 2015GBP (£) | Dec. 31, 2015INR (₨) | Jun. 30, 2015 | Mar. 31, 2015USD ($) | Mar. 31, 2014GBP (£) | Oct. 31, 2011GBP (£) | |
Capital Lease Arrangements [Member] | ||||||||||||||
Lease arrangement expiration | years through 2018 | years through 2018 | ||||||||||||
NTE [Member] | ||||||||||||||
Percentage of debt service cost | 150.00% | 150.00% | ||||||||||||
GBP [Member] | NTE [Member] | ||||||||||||||
Tangible adjusted net | £ | £ 600,000 | |||||||||||||
HSBC Bank [Member] | NTE [Member] | ||||||||||||||
Business acquisition, percentage of voting interests acquired | 51.00% | 51.00% | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 1,480,166 | |||||||||||||
Debt instrument maturity term | 5 years | 5 years | ||||||||||||
Line of credit facility, periodic payment | $ 27,265 | |||||||||||||
Line of credit variable interest rate | 4.00% | 4.00% | ||||||||||||
Interest expense | $ 1,161 | $ 13,248 | $ 9,011 | $ 29,950 | ||||||||||
HSBC Bank [Member] | NTE [Member] | GBP [Member] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | £ | £ 1,000,000 | |||||||||||||
Line of credit facility, periodic payment | £ | £ 18,420 | |||||||||||||
Debt instrument, base rate | 3.50% | 3.50% | ||||||||||||
Asakari Bank Limited [Member] | NetSol PK [Member] | ||||||||||||||
Interest expense | 36,980 | $ 37,068 | 77,986 | $ 72,775 | ||||||||||
Line of credit | $ 2,824,859 | $ 2,824,859 | ||||||||||||
Debt instrument, interest rate | 4.50% | 4.50% | 4.50% | 4.50% | 7.50% | |||||||||
Long term debt covenant description | long term debt equity ratio of 60:40 and the current ratio of 1:1. | long term debt equity ratio of 60:40 and the current ratio of 1:1. | ||||||||||||
Proceeds from Line of credit facility | $ 2,820,000 | |||||||||||||
Asakari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | ||||||||||||||
Line of credit | ₨ | ₨ 300,000,000 | |||||||||||||
Proceeds from Line of credit facility | ₨ | ₨ 300,000,000 | |||||||||||||
Investec [Member] | VLS [Member] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 128,647 | |||||||||||||
Line of credit | $ 222,025 | |||||||||||||
Debt instrument, interest rate | 3.13% | 3.13% | ||||||||||||
Debt instrument, term | 2 years | |||||||||||||
Debt instrument annual payment | $ 111,012 | |||||||||||||
Investec [Member] | VLS [Member] | GBP [Member] | ||||||||||||||
Line of credit | £ | £ 150,000 | |||||||||||||
Debt instrument annual payment | £ | £ 75,000 | |||||||||||||
Directors' and Officers And Errors and Omissions Liability Insurance [Member] | ||||||||||||||
Line of credit facility interest rate | 0.35% | 0.35% | 0.35% | 0.35% | 0.49% |
Debts - Schedule of Aggregate M
Debts - Schedule of Aggregate Minimum Future Lease Payments under Capital Leases (Details) | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
Due FYE 12/31/16 | $ 505,924 |
Due FYE 12/31/17 | 225,972 |
Due FYE 12/31/18 | 62,725 |
Total Minimum Lease Payments | 794,621 |
Interest Expense relating to future periods | (61,701) |
Present Value of minimum lease payments | 732,920 |
Less: Current portion | (459,811) |
Non-Current portion | $ 273,109 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | 6 Months Ended |
Dec. 31, 2015USD ($)shares | |
Officers and Employees [Member] | |
Issuance of common stock shares for services rendered | shares | 22,500 |
Issuance of common stock value for services rendered | $ | $ 118,025 |
Board of Directors [Member] | |
Issuance of common stock shares for services rendered | shares | 15,000 |
Issuance of common stock value for services rendered | $ | $ 76,352 |
Employees [Member] | Employment Agreements [Member] | |
Issuance of common stock shares for services rendered | shares | 26,000 |
Issuance of common stock value for services rendered | $ | $ 131,642 |
Incentive and Non-Statutory S53
Incentive and Non-Statutory Stock Option Plan (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation expense | $ 248,268 | $ 316,370 | $ 326,019 | $ 614,293 |
Compensation expense related to unvested Stock grants | $ 999,847 | 999,847 | ||
Employees [Member] | ||||
Compensation expense | $ 145,716 | |||
Number of stock options granted | 152,024 | |||
Fair value assumption of risk-free interest rate, minimum | 0.01% | |||
Fair value assumption of risk-free interest rate, maximum | 0.02% | |||
Fair value assumption of expected volatility, minimum | 41.65% | |||
Fair value assumption of expected volatility, maximum | 47.89% | |||
Fair value assumption of expected dividend | 0.00% | |||
Employees [Member] | Minimum [Member] | ||||
Stock option exercise price per share | $ 4.14 | $ 4.14 | ||
Stock option expiration date | 3 months | |||
Fair value assumption of expected life | 3 months | |||
Employees [Member] | Maximum [Member] | ||||
Stock option exercise price per share | $ 4.92 | $ 4.92 | ||
Stock option expiration date | 5 months | |||
Fair value assumption of expected life | 5 months |
Incentive and Non-Statutory S54
Incentive and Non-Statutory Stock Option Plan - Schedule of Common Stock Purchase Options and Warrants (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jun. 30, 2015 | |
Warrants [Member] | ||
Number of shares, Outstanding and Exercisable Beginning | 163,124 | |
Number of shares, Granted | ||
Number of shares, Exercised | ||
Number of shares, Expired / Cancelled | ||
Number of shares, Outstanding and Exercisable Ending | 163,124 | 163,124 |
Weighted Average Exercise Price, Outstanding and Exercisable Beginning | $ 7.29 | |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Expired / Cancelled | ||
Weighted Average Exercise Price, Outstanding and Exercisable Ending | $ 7.29 | $ 7.29 |
Weighted Average Remaining Contractual Life, Outstanding and Exercisable | 8 months 19 days | 1 year 2 months 19 days |
Aggregated Intrinsic Value, Outstanding and Exercisable | ||
Aggregated Intrinsic Value, Outstanding and Exercisable | $ 30,567 | |
Options [Member] | ||
Number of shares, Outstanding and Exercisable Beginning | 708,133 | |
Number of shares, Granted | 152,024 | |
Number of shares, Exercised | (47,024) | |
Number of shares, Expired / Cancelled | (11,000) | |
Number of shares, Outstanding and Exercisable Ending | 802,133 | 708,133 |
Weighted Average Exercise Price, Outstanding and Exercisable Beginning | $ 6.84 | |
Weighted Average Exercise Price, Granted | 4.50 | |
Weighted Average Exercise Price, Exercised | 4.14 | |
Weighted Average Exercise Price, Expired / Cancelled | 23.41 | |
Weighted Average Exercise Price, Outstanding and Exercisable Ending | $ 6.33 | $ 6.84 |
Weighted Average Remaining Contractual Life, Outstanding and Exercisable | 8 months 9 days | 1 year 2 months 19 days |
Aggregated Intrinsic Value, Outstanding and Exercisable | $ 572,352 | |
Aggregated Intrinsic Value, Outstanding and Exercisable | $ 2,141,466 | $ 572,352 |
Incentive and Non-Statutory S55
Incentive and Non-Statutory Stock Option Plan - Summary of Stock Options and Warrants Outstanding and Exercisable (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jun. 30, 2015 | |
Warrants [Member] | ||
Number Outstanding and Exercisable, shares | 163,124 | 163,124 |
Weighted Average Remaining Contractual Life | 8 months 19 days | 1 year 2 months 19 days |
Weighted Ave Exercise Price | $ 7.29 | |
Options [Member] | ||
Number Outstanding and Exercisable, shares | 802,133 | 708,133 |
Weighted Average Remaining Contractual Life | 8 months 9 days | 1 year 2 months 19 days |
Weighted Ave Exercise Price | $ 6.33 | |
Price Range One [Member] | Warrants [Member] | ||
Exercise Price, Lower | 5 | |
Exercise Price, Upper | $ 7.50 | |
Number Outstanding and Exercisable, shares | 163,124 | |
Weighted Average Remaining Contractual Life | 8 months 19 days | |
Weighted Ave Exercise Price | $ 7.29 | |
Price Range One [Member] | Options [Member] | ||
Exercise Price, Lower | 0.10 | |
Exercise Price, Upper | $ 9.90 | |
Number Outstanding and Exercisable, shares | 739,133 | |
Weighted Average Remaining Contractual Life | 8 months 16 days | |
Weighted Ave Exercise Price | $ 4.82 | |
Price Range Two [Member] | Options [Member] | ||
Exercise Price, Lower | 10 | |
Exercise Price, Upper | $ 19.90 | |
Number Outstanding and Exercisable, shares | 8,000 | |
Weighted Average Remaining Contractual Life | 6 months 29 days | |
Weighted Ave Exercise Price | $ 17.69 | |
Price Range Three [Member] | Options [Member] | ||
Exercise Price, Lower | 20 | |
Exercise Price, Upper | $ 29.90 | |
Number Outstanding and Exercisable, shares | 55,000 | |
Weighted Average Remaining Contractual Life | 5 months 1 day | |
Weighted Ave Exercise Price | $ 25 |
Incentive and Non-Statutory S56
Incentive and Non-Statutory Stock Option Plan - Summary of Unvested Stock Grants Awarded as Compensation (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jun. 30, 2015 | |
Incentive And Non-statutory Stock Option Plan | ||
Number of shares, Unvested beginning balance | 6,667 | 232,000 |
Number of shares, Granted | 254,000 | 113,275 |
Number of shares, Vested | (63,500) | (338,608) |
Number of shares, Unvested ending balance | 197,167 | 6,667 |
Weighted Average Grant Date Fair Value, Unvested beginning balance | $ 6 | $ 3.88 |
Weighted Average Grant Date Fair Value, Granted | 5.06 | 3.26 |
Weighted Average Grant Date Fair Value, Vested | 5.13 | 3.60 |
Weighted Average Grant Date Fair Value, Unvested ending balance | $ 5.07 | $ 6 |
Operating Segments (Details Nar
Operating Segments (Details Narrative) | 6 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 3 |
Operating Segments - Summary of
Operating Segments - Summary of Identifiable Assets (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Identifiable Assets | $ 87,231,010 | $ 88,962,334 |
North America [Member] | ||
Identifiable Assets | 6,175,310 | 7,162,846 |
Europe [Member] | ||
Identifiable Assets | 7,050,518 | 6,631,945 |
Asia - Pacific [Member] | ||
Identifiable Assets | 71,337,431 | 70,271,209 |
Corporate Headquaters [Member] | ||
Identifiable Assets | $ 2,667,751 | $ 4,896,334 |
Operating Segments - Summary 59
Operating Segments - Summary of Operating Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | $ 16,191,697 | $ 12,352,604 | $ 29,496,801 | $ 22,579,755 |
Net income (loss) after taxes and before non-controlling interest | 1,758,461 | (1,505,930) | 1,538,935 | (3,735,156) |
Intercompany Revenue [Member] | ||||
Revenues | 2,221,127 | 1,502,786 | 3,302,102 | 1,914,433 |
North America [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | (332,899) | 282,475 | 43,815 | (79,027) |
Europe [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | 35,530 | (388,162) | (159,051) | (1,003,425) |
Europe [Member] | Intercompany Revenue [Member] | ||||
Revenues | 105,707 | 92,641 | 242,493 | 223,169 |
Asia - Pacific [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | 3,172,652 | (609,115) | 3,484,643 | (1,809,664) |
Asia - Pacific [Member] | Intercompany Revenue [Member] | ||||
Revenues | 2,115,420 | 1,410,145 | 3,059,609 | 1,691,264 |
Corporate Headquaters [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | (1,116,822) | (791,128) | (1,830,472) | (843,040) |
Unaffiliated Customers [Member] | ||||
Revenues | 13,524,267 | 10,755,424 | 24,483,732 | 19,297,585 |
Unaffiliated Customers [Member] | North America [Member] | ||||
Revenues | 952,738 | 1,423,560 | 2,455,206 | 2,590,337 |
Unaffiliated Customers [Member] | Europe [Member] | ||||
Revenues | 1,679,224 | 1,678,892 | 3,177,755 | 3,239,915 |
Unaffiliated Customers [Member] | Asia - Pacific [Member] | ||||
Revenues | 10,892,305 | 7,652,972 | 18,850,771 | 13,467,333 |
Affiliated Customers [Member] | ||||
Revenues | 2,667,430 | 1,597,180 | 5,013,069 | 3,282,170 |
Affiliated Customers [Member] | Europe [Member] | ||||
Revenues | 538,703 | 242,704 | 986,543 | 531,694 |
Affiliated Customers [Member] | Asia - Pacific [Member] | ||||
Revenues | $ 2,128,727 | $ 1,354,476 | $ 4,026,526 | $ 2,750,476 |
Operating Segments - Summary 60
Operating Segments - Summary of Capital Expenditures (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Capital expenditures | $ 1,177,443 | $ 1,772,866 |
Corporate Headquaters [Member] | ||
Capital expenditures | 1,786 | |
North America [Member] | ||
Capital expenditures | $ 44,679 | 4,866 |
Europe [Member] | ||
Capital expenditures | 63,222 | 155,895 |
Asia - Pacific [Member] | ||
Capital expenditures | $ 1,069,542 | $ 1,610,319 |
Non-Controlling Interest in S61
Non-Controlling Interest in Subsidiary (Details Narrative) - NetSol PK [Member] - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2015 | |
Company purchased shares of common stock | 669,000 | |
Shares open market value | $ 347,623 | |
Non-Controlling Interest, Percentage | 34.15% | 34.90% |
Maximum [Member] | ||
Non-Controlling Interest, Percentage | 34.90% | |
Minimum [Member] | ||
Non-Controlling Interest, Percentage | 34.15% |
Non-Controlling Interest in S62
Non-Controlling Interest in Subsidiary - Balance of Non-Controlling Interest (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Non-Controlling Interest | $ 14,016,957 | $ 13,840,641 |
NetSol PK [Member] | ||
Non-Controlling Interest, Percentage | 34.15% | 34.90% |
Non-Controlling Interest | $ 10,823,064 | $ 11,411,954 |
Net Sol Innovation [Member] | ||
Non-Controlling Interest, Percentage | 49.90% | 49.90% |
Non-Controlling Interest | $ 2,923,743 | $ 2,035,548 |
VLS, VLHS And VLSIL Combined [Member] | ||
Non-Controlling Interest, Percentage | 49.00% | 49.00% |
Non-Controlling Interest | $ 270,150 | $ 393,139 |